Colorado’s Public Utility Commission has just approved another rate increase for Xcel. If you are an Xcel customer, your electric bill will go up yet again on May 1.

The residential rate increase will be about 5.5 percent phased in over a three-year period and add about $114 million to Xcel’s annual revenue. This is on top of rate increases in 2007, 2009 and 2010 that raised residential bills by about 20 percent. Commercial and industrial customers will see lower percentage increases.

So what is going on? Rate increases used to come about once a decade; now they are coming every year or two. What is causing this and what can individual ratepayers do about it?

As with most things, the causes are complex. At a fundamental level, Xcel is in the middle of a historic transition, from an energy system based on fossil fuels to one based on renewable and low-carbon technologies, and there are numerous costs associated with this monumental transition.

The good news, though, is that the fuel-free renewable energy system we are moving into shows every indication of having lower associated costs. Information on recent wind and solar bids in Colorado and elsewhere in the West indicates that wind is very close to being cost-competitive with fossil fuel resources and solar energy is not far behind.

In Colorado, the incremental costs of new renewable energy are capped at 2 percent of your bill. There are some questions about the accounting on this cap, but however they are viewed, the costs of renewable energy are not the reason for Xcel’s recent rate increases.

So what is driving these rate increases? The answer is clear: Most of the hikes are associated with Xcel’s investments in fossil-fuel resources. The 2007, 2009 and 2010 rate increases were largely driven by the need to begin recovering the nearly $1 billion that Xcel spent on the new Unit 3 coal plant in Pueblo, which helps serve Xcel’s Denver metro load.

The largest driver for the May rate increase has been Xcel’s decision to terminate its wholesale contract with Black Hills Energy, which serves Pueblo and the Arkansas River Valley. Xcel’s request to have retail ratepayers make up for the lost revenue was strongly opposed by many experts testifying on Xcel’s current rate increase. These experts pointed out that business decisions made on Xcel’s wholesale side should not add to the financial burden of Xcel’s retail customers who bore no responsibility for Xcel’s decision.

Why are the Public Utilities Commission and the Office of Consumer Counsel — which are supposed to represent residential, agricultural and small-business ratepayers — not fighting these rate increases harder? The staff at the PUC and the OCC include many hard-working and dedicated analysts, but Xcel is a very large monopoly with more than $3 billion in revenues each year. Moreover, all of Xcel’s rate case costs are referred to as “costs of business” and are passed on to ratepayers.

In short, Xcel has usually gotten its way because it is just too hard to really stand up to its overwhelming resources and ability to generate paper and spreadsheets. It is like trying to negotiate with a grizzly bear: Pretty soon, you just take what you can and call it good.

Xcel’s original request was for a $142 million annual revenue increase starting in 2012. The final deal will provide $114 million in an annual revenue increase over a three-year period. In the world of negotiating with Xcel’s monopoly power, this is figured to be “good enough.”

In addition to rates going up each year from now until 2014, Xcel is busy spending more money — largely on fossil-fuel resources — and most observers expect another large rate increase in 2015.

There are solutions, but in order to achieve them, ratepayers will have to band together in the face of Xcel’s tremendous financial and political strength.

Leslie Glustrom (lglustrom@ gmail.com) is director of research and policy for Clean Energy Action.